Mounting worries over the quickly spreading Delta Covid variant’s impact on the global economy solidified further this week after Goldman Sachs and JP Morgan Chase downgraded economic outlooks on China. Goldman sees third-quarter growth slowing to 2.3% from 5.8%. A rebound in the fourth quarter may transpire, however, but the full-year projection remains worse off as restrictions are seen hampering consumption in the Chinese economy. Nearly 100 locally sourced cases were reported on Monday, according to China’s National Health Commission.
The downbeat outlook weighed on crude oil and iron ore prices, two major commodities that are particularly insightful to gauge demand in the world’s second-largest economy. Crude oil fell nearly 2% on Monday, while the global benchmark, Brent, sank just over half a percent. Meanwhile, iron ore prices added to recent losses, extending the monthly drop to almost 10%. Iron ore prices are highly reliant on Chinese demand, given it is the largest importer of the mineral ore.
